European Union Response to the Challenge

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Stavros Dimas

One of the first policy documents that I presented to the European Union (EU) Commission after I was appointed as the commissioner for environment was called Winning the Battle against Climate Change. This policy document, or Communication, as we call it in Brussels, was one of the most important achievements of the Barroso Commission because it outlined the key elements for the EU's climate change strategy. It became the blueprint for the European response to climate change and, with the support of the member states (particularly the UK presidency), the main ideas were taken up by the international community at the 2005 Climate Conference in Montreal. However, there was one thing that we got wrong, and that was the title. As the scientific evidence accumulates, it is clear that the fight against climate change is much more than a battle. It is a world revolution that we need to engage in with great determination if we are serious about the climate crisis we are facing.

Damaged economies, refugees, political instability, international security and the loss of life are typically the results of war; but they will also be the results of climate change if we allow it to continue unchecked. Our fight against climate change can be likened to a drastic change because in order to reduce emissions something very like a revolution in the economy is needed. All sectors - transport, energy, agriculture and foreign policy - must work closely together to meet a common objective. This is also a sign of interdependence because every country in the world will be affected by the impacts of climate change and should contribute to fighting it.

In today's world of accelerating globalization there are many challenges that nations simply cannot address working on their own: fighting terrorism, pandemics such as bird flu, poverty in Africa, nuclear proliferation, financial and economic crisis, energy security and climate change. These are all areas where countries have to find a way of working together if their policies are to have any chance of success. Indeed, climate change presents the most urgent, pressing and serious challenge to an increasingly globalized world and there is no alternative to global cooperation. No country can tackle climate change in isolation. The UK's emissions of greenhouse gases are responsible for approximately 2 per cent of the annual global total. EU emissions are responsible for 14 per cent. The contribution of all is needed and a global response is the only possible solution. There are a number of reasons why this will need a strong and effective European Union, both to contribute to the fight against climate change and to maintain our international leadership.

First and foremost, effective 'climate diplomacy' is essential if we are to convince the US and key developing countries to participate constructively in negotiation. The EU has over 450 million citizens and has the largest market in the world. It is self-evident that by acting together we have a much greater diplomatic influence than by acting alone.

Second, the EU must lead by example. We have already made progress with regard to emission reductions; the latest EU inventory of greenhouse gas (GHG) emissions for 2006 shows that total EU-27 greenhouse gas emissions were 10.8 per cent below base year levels without emissions and removals by land use, land-use change and forestry and were 0.3 per cent lower compared to 2005. At the same time the EU-27 economy grew by 3 per cent in 2006 compared to 2005. Total GHG emissions in the EU-15 were 2.7 per cent below the emissions of the Kyoto base year. Since 1990, the EU-15 economy (expressed as gross domestic product, or GDP) grew by almost 40 per cent. The respective projections show that - with current efforts and additional measures - the EU-15 will reduce their emissions by 11.3 per cent and over-achieve their Kyoto Protocol emission reduction commitment of an 8 per cent reduction. EU-27 will reduce their emissions by 16.3 per cent compared to base year levels.

However, while it is very encouraging that we have already made huge progress in cutting emissions as the European economy grows, it is clear that many member states need to accelerate their efforts to limit emissions further, notably after 2012. With our Climate and Energy Package agreed last year, the EU has now developed the necessary tools that will enable it to reduce its GHG emissions by at least 20 per cent by 2020 compared to 1990.

Third, the EU has developed the world's first example of a cross-border Emissions Trading Scheme (ETS) to reduce greenhouse emissions. It is the world's first and largest international emissions trading scheme and covers some 11,500 installations in the EU, accounting for almost half of EU carbon dioxide emissions. Set up in January 2005, we are still in the early stages of the scheme; however, early academic research indicates that emissions have fallen by several per cent compared with their levels before the start of the EU ETS. All indicators suggest that the ETS is one of the most cost-effective policy tools that exists for reducing emissions, and it is a model that the rest of the world is already looking to as we work towards a global approach to emissions control.

The fourth motivation for a strong and united EU is that key EU policies also need to be mobilized against climate change. These include the obvious sectors such as transport and energy. Research policy and industrial policy are also needed in order to develop and promote new technologies. Inside the EU, regional funds and agricultural policy will have to support investments in emissions reduction and climate change adaptation. Development cooperation will have to support similar investments in developing world countries, and the EU's agricultural policy will notably have to protect the soils and forests that absorb carbon dioxide.

The fifth and final reason relates to competitiveness. Industry often claims that high environmental standards could damage competitiveness; but a common European approach applies across the entire single market. It therefore creates a level playing field in the EU while allowing the environmental objective to be met.

All together this constitutes a convincing case for a strong and effective EU stance regarding climate change. Let's now turn to international action: getting an ambitious and comprehensive climate agreement in Copenhagen is now our priority since EU efforts alone will not be sufficient to limit climate change.

The science on climate change is now clear and the impacts of today's climate change striking. In the summer of 2007, the North-West Passage shipping route through the Arctic became navigable for the first time since records began. The area covered by Arctic sea ice has shrunk to the smallest ever seen. The situation in the Arctic Sea is only one of many signs that climate change is happening.

We have a good idea of the likely social, environmental and economic impacts of both determined action but also of no action, based on the Intergovernmental Panel on Climate Change (IPCC) and Stern reports. New technologies need to be developed; but it is first and foremost essential to ensure a speedy deployment of existing low-carbon and energy-efficient technologies. For this to materialize, we need to get the right incentives and regulatory environments in place as quickly as possible. This is all the more so since we have the resources to make the necessary investments. Our greatest challenges are not scientific or technical or even economic. The challenges are political. At present we have political commitments from Europe's leaders to lead the fight against climate change; but when it comes to making difficult economic choices, there is still a great gap between rhetoric and reality.

The EU Commission's starting point in relation to the science is that climate change must be limited to no more than 2°C above pre-industrial temperatures. The scientific evidence indicates that the risks of irreversible and potentially catastrophic impacts will greatly increase beyond this threshold. Science tells us that if we are to have even a 50 per cent chance of keeping within this 2°C limit, worldwide greenhouse gas emissions will have to peak before 2020 and then fall by at least 50 per cent of 1990 levels by 2050. As the next step towards this longer-term reduction, and as part of a new global climate agreement, the commission is proposing that developed countries cut their emissions to an average of 30 per cent below 1990 levels by 2020 and that developing countries reduce their emissions by 15 to 30 per cent below business as usual by 2020.

An international agreement is a necessary condition for meeting our objective of limiting temperature increases to below 2°C. Irrespective of this, the EU is in any event committed to a reduction of its emissions by at least 20 per cent by 2020.

There are a number of reasons for taking such an independent commitment. First, this strengthens our leadership in the international context by showing determination for action. Second, it will benefit our economy in terms of increased energy security and public health. Third, it gives a welcome signal to the market that the emissions trading system will continue after 2012. Last, but not least, it enhances predictability and encourages investment in clean technologies.

A firm commitment by the EU and the rest of the developed world to tough emissions reductions is essential if we are to convince developing and transition countries to take action. But without the cooperation of these countries, it will simply not be possible to keep global warming within 2°C. By 2020 they will be emitting more than developed nations.

Turning to the developing world, the rise in emissions from developing countries, and in particular from emerging ones, needs to start slowing down as soon as possible; from around 2020, their emissions need to be reduced in absolute terms. This will be a major challenge; but one can be optimistic: there are many options for cutting emissions that would deliver immediate economic and social benefits and that would not affect their legitimate pursuit of economic growth and poverty reduction. To take one example, major potential exists in energy efficiency that should undoubtedly be the focus of short-term investments. This will obviously require upfront investment, but will generate a net benefit in the mid term. I am confident that developing countries will engage in this with the required determination. In fact, this is already happening: China, India, Brazil, South Africa and Korea already have, or are in the process of developing, climate and energy plans. This should be further encouraged and supported, bilaterally and multilaterally.

Another challenging issue will be to tackle deforestation. We cannot continue to overlook this since it is the second largest emissions source after fossil fuel combustion, and contributes around 20 per cent of global emissions. It is also one of the main reasons for the loss of global biodiversity. Our figures indicate that for the 2°C ceiling to be met, net deforestation needs to be halted completely within the next two decades and then reversed through reforestation and afforestation schemes. This is now part of the climate negotiations where I hope we will come to an agreement on an incentive mechanism, rewarding performance-based policies supported by adequate finance.

These proposals are ambitious; however, the bottom line is that they are essential if we are to keep global warming within manageable limits and spare future generations the most devastating economic, social and environmental impacts of climate change. As the Stern Review2 has underlined, the benefits of taking action far outweigh the costs. Effective international action on climate change means going beyond national self-interest and pooling sovereignty.

Clear and new scientific evidence since the last IPCC report produced in 2007 all points in the same direction: climate change is happening and accelerating at a faster rate than previously predicted. This calls for urgent action and an international agreement to be reached in Copenhagen at the end of 2009 is imperative.

There is no excuse for delaying action: we need to show determination and be creative in devising an ambitious and fair international framework. As the EU demonstrated with the adoption of its Climate and Energy Package in a record time, when political will is there, success is around the corner.

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